India’s Tata Power Reports 2.4X Jump In Profit From Renewable Energy

India’s ‘largest integrated power company’ Tata Power reported a huge increase in profit from its renewable energy business during the financial year ending March 2018.

Tata Power, part of the Tata conglomerate, reported FY2017-18 financials that showed a massive increase of 144% in profit after tax. The company reported a profit of Rs 2,679 crore ($400 million) largely due to exceptional items that contributed over 41% to the total profit. However, profit from renewable energy business also increased to a new record.

Interestingly, the company also reported its highest-ever loss from Coastal Gujarat Power Limited, India’s largest coal-based power plant. Losses at the power plant increased last financial year due to 25% increase in coal prices, the company reported in a press release.

Tata Power reported a profit of Rs 425 crore ($63.6 million) from its renewable energy business which mainly includes solar and wind energy projects. Renewable energy business, thus, contributed nearly 16% to the total profit for the financial year. If exceptional profit items are excluded, this share increases to an impressive 27%.

In FY2016-17 the company had reported a net profit of Rs 1,397 crore ($209 million) while the contribution from renewable energy business was Rs 175 crore ($26 million), or 12.5%. At the end of FY2016-17, Tata Power’s renewable energy capacity stood at 3,141 megawatts which increased to 3,417 megawatts.

In FY2016-17 Tata Power completed the acquisition of 1,140 megawatts of wind and solar power projects from Welspun Energy. Before that Tata Power did not use to report profits from its renewable energy business. However, now the capacity as well as the profit share from the business has increased significantly.

Tata Power reported total generation of 53.5 billion kWh of electricity in FY2017-18, up from 52.5 billion kWh in FY2016-17. Of this, its solar power business reported generation of 919 million kWh while its wind energy business reported generation of 1.69 billion kWh. Thus, the share of solar and wind in the total generation was slightly less than 5%.

In terms of installed capacity, renewable energy has a share of 29% in Tata Power. While in capacity terms the share may be high, in generation terms Tata Power has to do a lot to increase the share of renewable energy. The company hopes to have share of ‘green and clean energy sources’ in the generation output at 40-50% by 2025.

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